Jack Townsend offers this blog on Federal Tax Crimes principally for tax professionals and tax students. It is not directed to lay readers -- such as persons who are potentially subject to U.S. civil and criminal tax or related consequences. LAY READERS SHOULD READ THE PAGE IN THE RIGHT HAND COLUMN TITLE "INTENDED AUDIENCE FOR BLOG; CAUTIONARY NOTE TO LAY READERS." Thank you.

Thursday, May 1, 2014

Shokrollah Baravarian, of Beverly Hills, California, a former Mizrahi Tefahot Bank Ltd. banker, was indicted for conspiracy in California. See DOJ press release here. Here are the key excerpts:

According to the indictment, Baravarian, a former senior vice president at the Los Angeles branch of a bank headquartered in Tel Aviv, Israel, conspired to conceal the existence of undeclared accounts owned and controlled by U.S. customers in Israel. The indictment alleges that these accounts were concealed from the IRS by opening them under pseudonyms, code names and the names of nominee entities set up in the British Virgin Islands and the island of Nevis.

* * * *

“The defendant assisted others to hide the true ownership of offshore bank accounts through the use of code names and nominee entities,” said Chief of IRS-Criminal Investigation Richard Weber. “Our special agents unraveled the complex financial transactions used to disguise the funds in the undeclared accounts. Those who help others commit tax evasion risk prosecution and substantial monetary penalties.”

The indictment further alleges that Baravarian assisted U.S. customers in secretly accessing the funds in their undeclared accounts by obtaining back-to-back loans from the Los Angeles branch of the bank. According to the indictment, a back-to-back loan was a loan that was secured by funds in an undeclared account in Israel and issued by the Los Angeles branch to a U.S. customer. Baravarian is alleged to have helped conceal the fact that U.S. customers were using their own funds as collateral by purposely not keeping copies of loan-related documents in the files at the Los Angeles branch. These documents included Israeli account information and pledge agreements used to secure the loans. As detailed in the indictment, some U.S. customers obtained back-to-back loans from the Los Angeles branch by transferring funds to Israel from other foreign countries, including Switzerland and China.

The indictment further alleges that a banker in Israel would periodically travel to Los Angeles and meet with U.S. customers to discuss their account statements. Prior to making these trips, the banker would redact the names of the U.S. customers reflected on the account statements.

Baravarian is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with conspiring to defraud the United States in connection with using undeclared bank accounts in Israel to obtain back-to-back loans in the United States.

* * * *

If convicted, Baravarian faces a potential maximum prison term of five years and a maximum fine of $250,000. The charge contained in the indictment is only an allegation. The defendant is presumed innocent and it is the government’s burden to prove guilt beyond a reasonable doubt.

No comments:

Post a Comment

Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.